Snowball, Shadforth create advice pillar

Snowball Group Ltd and Shadforth Financial Group Holdings are to merge, and claim they will create a national financial advice pillar with $14.3 billion in funds under management (FUM).

The boards of the two financial advisory groups were unanimously recommending the scrip deal to shareholders whereby Snowball would make a takeover bid to acquire all of Shadforth's shares, the companies said in a statement on Thursday.

Shadforth's shareholders are being offered 2.15 Snowball shares for each Shadforth share they own, an offer that will leave them owning 71 per cent of the merged entity.

Snowball listed in 1987 and on Thursday its shares surged four cents, or 11.59 per cent, to 38.5 cents.

Shadforth's directors together hold a 13.2 per cent stake in the company and have already agreed to accept the offer within two weeks of the offer opening on June 6.

All of the current directors of both companies will be directors of the merged entity, with Snowball chair Eric Dodd becoming its chairman, and Shadforth chair Sam Gannon its deputy chairman.

Snowball executive Tony McDonald will lead the merged entity as group chief executive.

He said it would become a pre-eminent, national pillar in the financial advice market that wasn't aligned with banks or large wealth managers and insurers.

"Snowball will now have the scale and enhanced expertise that the merger brings to provide financial advice that will deliver material benefits to clients, shareholders, advisers and staff," he said.